Focus: US Businesses In studying marketing agencies in Toronto, one…
UK Voted to Leave European Union
The collective agreement called the EU turned out poorly for Britain, and the UK is leaving the union. The British pound dropped with some panicky talk of recession, but we know everything will bounce back. However, without the UK, the EU may itself dissolve. Regardless, I’m excited about working with more UK businesses and look forward to new trade with the UK.
Germany and France will now be inundated with migration issues and be unable to sell to the UK. All this will settle in soon, and perhaps with this enlightenment, the EU will change it’s conditions quickly to hang onto the UK. But if the UK does leave for good, it has waiting friends in North America and Hong Kong, and really, these markets are much more receptive to UK companies.
The UK is a key thread in the fabric of International business, yet the EU’s migration rules are strange. In North America, we have free trade deals, but there’s no way you can just up and move to the US. Even if you have a shovel and dig under the big fence, they’ll put you in jail, and then send you back.
The UK was running a £24B trade deficit with EU countries. How long could that continue?
The UK was way too lenient with immigration and the numbers are staggering. How many countries can handle that level of immigration without bursting at the seams? They all wanted into Britain, not France, Spain, Germany, or the Netherlands.
But is the gloom overdone? Jason Hollands, a spokesman for the investment adviser Tilney Bestinvest, believes so. He said: “The UK stock market is dominated by large international companies, whose performance is not closely linked to domestic UK issues. Markets don’t like uncertainty and there are real risks around. But the Chinese economy, US interest rates and oil-price movements are more significant risk factors.”
No Need for UK Firms to Panic
In North America, we need to do more business with the UK. British firms would find our own market of 360 million consumers a good one to be more involved in. Although Obama has warned the UK it would take 10 years to do anything, incoming president Trump would not stand for delays of that time. It highlights the US’s own coming Brexit-style vote in the fall that will bring dramatic change and a breath of fresh air to business in the US.
Our governments here do need to modernize our agreement with Britain right now, it’s a window of opportunity to build a powerful connection with the UK. If the UK needs a helping hand, we should provide it because the UK is important, and they like us, have good connections with Hong Kong. That 3 way interaction can be very powerful in the realm of international finance and give the UK access to the Pacific Rim.
In 2016, an Ocean isn’t a Barrier to Trade
The UK was open minded about the EU’s rules, but in the end, they were burdened by it all. Regardless of how Brits voted on Brexit, the business and economic challenge is exactly the same as it was one week ago. The UK needed something new. And North America is that something new. The Atlantic isn’t a barrier. It’s the same distance from Boston to San Diego as it is to London.
Surprise, surprise, the US has a 1 billion dollar trade surplus with the UK.
A Stellar Opportunity to Grow Trade with a Non Hostile Country
So Brexit is behind us. We should make more contact with our friends in the UK and begin setting the stage for increased trade and commerce. I’m looking forward to helping my UK client who offer an SaaS online hr software product, eventually build a strong presence in North America and in the UK. And I hope the UK startup community begins looking to the US, China, and Canada for trade and business.
Did you know the Chinese set up a Yuan 2 trillion fund to help startups? Isn’t this what we should be doing? Ask your government to begin assisting small business and facilitating connections to small businesses in the UK. Collectively, we can be a huge force in our economic recovery, and helping the UK finally recover from the 2008 recession.
Incoming President Donald Trump will hopefully speed up trade talks with the UK, whereas outgoing President Obama has been anything but optimistic. Here’s what Trump says he will do for small business:
This lower tax rate cannot be for big business alone; it needs to help the small businesses that are the true engine of our economy. Right now, freelancers, sole proprietors, unincorporated small businesses and pass-through entities are taxed at the high personal income tax rates. This treatment stifles small businesses. It also stifles tax reform because efforts to reduce loopholes and deductions available to the very rich and special interests end up hitting small businesses and job creators as well. The Trump plan addresses this challenge head on with a new business income tax rate within the personal income tax code that matches the 15% corporate tax rate to help these businesses, entrepreneurs and freelancers grow and prosper.
However, small businesses and tech startups need capital, and we know that on a whole, these companies create more jobs. This is money well spent.